# In the matter of Lanco Babandh Power Limited

> NCLT judgment dated 2024-05-10. Citation: TCN-2024-NCLT-01376. The Paradeep Port filed an application seeking to be declared a secured creditor based on a…

- **Court:** NCLT
- **Order date:** 10 May 2024
- **Citation:** TCN-2024-NCLT-01376
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/lanco-babandh-power-limited-99a1f762

## Summary

### Background

The Paradeep Port filed an application seeking to be declared a secured creditor based on a statutory charge under Section 59 of the Major Port Trust Act, 1963, for assets of M/s. Lanco Babandh Power Limited. They also sought to nullify the e-auction sale of these assets by the liquidator to Jindal Steels & Power Limited. The Corporate Debtor was setting up a thermal power plant in Odisha and imported goods through Paradeep Port, which remained with the port since 2011. Liquidation proceedings against the Corporate Debtor were initiated in 2018, and a liquidation order was passed in 2019. The Respondent No.1 (Liquidator) filed IA No.939 of 2020, which was allowed, directing the Applicant and Customs Authorities to release the goods. The Applicant challenged this

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## Facts

The Corporate Debtor, M/s. Lanco Babandh Power Limited, was setting up a thermal power plant in Odisha. Between 2011 and 2016, it imported 17,273 MTs of goods/assets through Paradeep Port, which have been lying with the port since November 25, 2011. A consortium of banks led by ICICI Bank initiated corporate insolvency proceedings against the Corporate Debtor, which were admitted on August 29, 2008. A liquidation order was passed on November 27, 2019. Paradeep Port claimed to be a secured creditor based on a statutory charge under Section 59 of the Major Port Trust Act, 1963. The Liquidator initiated an e-auction of the Corporate Debtor's assets, which was challenged by Paradeep Port. The Liquidator classified Paradeep Port as an unsecured operational creditor, which

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## Issues and analysis

### Issue 1: Whether the Applicant, Paradeep Port, can be declared a secured creditor by virtue of the statutory …

**Ratio:** The ratio is that security interest must be proved in accordance with the provisions of

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**Reasoning:** The court reasoned that no security interest had been created in favor of the Applicant

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**Interpretation:** This issue involves the interpretation of Section 59 of the Major Port Trust

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**Application:** In this case, the Applicant failed to prove its security interest in accordance

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## Parties

- **Judges:** Rajeev Bh…; Sanjay…
- **Appellants:** M/s.Pradeep Port…
- **Respondents:** M/s.Lanco Babandh…; Mr Sanjay…

## Timeline

- **2011-11-25 — Goods Lying with…**: Goods/assets of the Corporate Debtor…
- **2016-08-10 — Goods Lying with…**: Goods/assets of the Corporate Debtor…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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